Joseph Yam's New Year Wishes

inSight

25 Jan 2001

Joseph Yam's New Year Wishes

Again, in this festive season, I do not wish to burden readers with another heavy piece of analysis on monetary affairs. However, I have been repeatedly warned not to stray too far in this column away from my immediate area of responsibility. So, as a compromise, let me share with readers my Lunar New Year wishes as Chief Executive of the Hong Kong Monetary Authority.

For the external environment, in which our highly externally oriented economy has to operate, I have eight wishes for the Year of the Snake:

First, that the robust economic growth that we have seen for some years now in the Mainland of China, induced by the farsighted and steadfast reform and liberalisation, can be sustained.

Second, that WTO accession for China will materialise this year, generating tremendous business opportunities for all concerned.

Third, that the Federal Reserve Board will skilfully steer a soft landing for the US economy and send it onto a non-inflationary growth path that is sustainable in the long run.

Fourth, that the Japanese financial system, which has been such a drag on the Japanese economy, will eventually emerge out of its difficulties, paving the way for a sustained economic recovery.

Fifth, that the structural reform of the financial systems of some of the economies in the Region will proceed expeditiously, thus preventing a recurrence of financial crises.

Sixth, that the relationship across the Taiwan Strait will improve and that ways will be found to enable the synergy between the two economies to be exploited for the benefit of all concerned.

Seventh, that the technology revolution will not run out of steam but will continue to steadily increase the productivity of the world economy.

Eighth, that the potency of international finance will be harnessed for the benefit of efficient international financial intermediation, and that its destabilising risks will be effectively managed.

For the domestic environment, I have a further eight wishes for the Year of the Snake:

First, that our economy will continue to record robust growth and that the people of Hong Kong will all share in it.

Second, that there will be neither deflation nor inflation, and that interest rates will be kept low.

Third, that we can return to full employment.

Fourth, that our exchange rate link with the US dollar will continue to remain stable without the need for any significant interest rate premium for the Hong Kong dollar over the US dollar, as indeed has been the case since the financial turmoil of 1998.

Fifth, that our investment management of the Exchange Fund will produce handsome profits surpassing those of last year.

Sixth, that the banking system, working in traditional partnership with the HKMA, will manage the reform measures to be introduced this year without difficulties and that it will serve the people of Hong Kong even more efficiently than in the past.

Seventh, that the Hong Kong stock market will serve as the major international fund raising avenue on an international basis and that the Hang Seng Index will enjoy a healthy year.

Eighth, that the property market will perform in a manner that will provide suitable relief for homeowners sitting on negative assets.

Joseph Yam
25 January 2001

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